What to Do with a Dependent Sibling

A lot of troubles occur between families because of sibling dependency. When a relative particularly a younger brother or sister loses their job and have nothing to cover for themselves they turn to their older siblings for help.

According to an expert, Suzanne de Baza, who is also VP at the Ameriprise Financial for wealth studies, more and more cases of these sibling dependencies are occurring in the society nowadays.

It is hard to shoo them away because you feel responsible for them, but at the same time, tolerating it is not very healthy for your financial life. Studies show that divorce and losing a job are the most common reason why people become mooches.

Divorce costs are quite expensive, also not to mention the emotional feeling you get after the break up. It would be even worse if you and your ex-partner have kids and you have poor credit.

Here are the measures you have to make when you have a sibling who wants to move in and ask for your help financially.

First, say what is in your mind. Do not keep quiet when you feel being taken advantage of. Negotiate with your sibling, give them a time frame when they will have to move out and stick to it. Talk to him nicely about it, tell him you understand what he’s going through but you are also unable to support him.

Second, do not expect for loans to be repaid. Just think of it as a present, if your sibling borrow money may it official with a contract, this will prevent any family conflict between you two.

Finally, follow-up on your sibling. See how he’s doing, do not be hesitant to call him up and remind him of his bills, ask him how he is doing or if he has to leave your apartment in a few days.

3 Financial Habits to Break

Many individuals want to be secured during their retirement. They want a worry free environment free from trouble and financial problems that they will not be able to fix once they have ran out of means to acquire money and are only left with their pensions.

That is why it is very important that individuals should realize that there are three very bad habits they need to break in order for them to have a better financial life.

First is spending only for a 401 (k) insurance account for retirement. The 401 (k) is popular because it seems like a great deal for clients to being able to save by paying for a nontaxed deposit to pay for it in a later time. But according to the president of Capital Financial Advisory Group, Coach Pete D’Arruda, it would be smarter to invest in a Roth IRA where you are already taxed during deposit and not later.

He made it simple: would clients really want to pay for a smaller amount for an initial deposit or to be taxed a large sum later on, due to all the aggregated “tax-free” deposits they made. It is wise for you to take a closer look at the benefits you get from different saving organizations, not just one.

Second bad habit to break: hesitating to save because the amount is too “small”. It is always better to have something in small amounts than to have nothing at all. No matter how small the money you save in a month, it will eventually build up and increase over time.

Always think about your future, realize that money will be one of the very important things you need. You may be left with no more means to acquire it in the future but you will never cease to need money.

Finally, the last habit you need to break is spending on “small” things, like coffee. You may think you cannot save a lot of money, but you fail to realize you are spending much more on things that you don’t really need. Example is your cup of coffee, your packet cigarettes, even your dinner outs.

Keep a close eye on your spending; ask yourself “Do I really need it?” Before you decide to spend on it, is a cup of coffee today really more important than anything you might need to purchase in the future?

Financial Crisis for College Students

College in the United State is not a luxury everyone can afford. It costs so much and average citizens would be forced to get loans that could suffice the amount of their child’s tuition. But the problem is, these money lenders, parents and students who get financial aids for college often have no idea what type of loans they acquired.

About 7 of 10 of those that go to college get loans for the tuition, but the way the payment works is unknown to them. One example is Tom McWilliams, a major in psychology and computer science student is studying at George Washington University, and annually pays $60,000 for his tuition and his boarding fees.

McWilliams has no clue what type of loan he has if it’s from the government, or if it’s from a private moneylender, subsidized or not. This is one of the problems of college students right now. They do not know where the money that they get for their education comes from, they even have no idea how much they are paying the university.

The funny thing is, these money lenders have the freedom to let the client know about the financial situation of the loan or to keep them in the dark. According to Arne Duncan, Education Secretary, this is the reason why clients have no idea or often do not have enough clues about their loans. This cluelessness paved way to the tremendous amount of student debt in loans nationally.

The price for college education increases every year, this also raises the amount of loans that students would ask for. However, colleges are applauding the president’s current efforts in trying to pass a law that would maintain the college interest rates at 10% monthly. This is going to be a big help for college graduates in the future, but they will still owe money even after 20 years of their graduation.

Obama Calls for Lawmakers to Maintain Student Loan Rates

American President Barack Obama pushes for a pocket friendly interest for student financial aids issued by the government. This is part of his campaign for the coming elections.

The current president is addressing law makers to create a new law to preserve the 3.4% interest rates on education before they increase again on July. This will benefit 7.4 million student applicants. Obama believes that education should be affordable to citizens. This is a preparation for a possible demand for college graduates in the future. But as the demand increases so does the price of attaining this level of education.

According to reports, there are more unpaid student financial mortgages compared to credit card liabilities, this is discouraging less fortunate individuals from pursuing a college education. Getting into college is not a luxury for every American citizen, thus the president wants to somehow change this scenario.

To prove he is serious in his campaign, in the coming weeks, Obama will start visiting some colleges and universities in North Carolina, Colorado and Iowa.

This is also part of his strategy to convince law makers to take part of his vision. Some members of the Republican Party refuse to decrease rates because it would force them to impose higher taxes on citizens.

According to them, creating a “bad” policy for the sake of a presidential campaign is uncalled for.

The dilemma that they face is whether to grant the financial aid rates that would enable more citizens to step into college, and pile additional burden to tax payers. Or raise rates and save tax payers some slack.

Congress promises to look for a solution to fit the benefits of both parties. Hopefully, more citizens can enter college without imposing higher taxes. Obama believes that his solution will be beneficial for middle class citizens. The president explains that making interest rates higher for those who want to go to college will be just like cutting off the future of the nation.

If more people will not go to college because they cannot afford it, then it just means that America will sink because there are less people who will be professionals in the future.

‘No More Student Loans for Non-members’ JPMorgan

Banks in the United States are taking tighter measures against lending to clients who are not members of the entity. This new regulation is going to be adopted by the JPMorgan Chase & Co., as they would cease to give student loans.

According to Steve O’Halloran, a spokesperson of the bank from New York, the loan given to private persons when it comes to education has decreased. He adds, that the government is stepping up and is providing the aid that students need.

JPMorgan will now demand Chase accounts from their clients. Furthermore, they could only apply for a loan or credit-card to get the financial aid. The bank will still go on in collecting and processing loans that they had given to student. They will also continue to negotiate with other entities that are engaged in giving financial aids to students.

According to the American Banker, the decision of JPM came after they were cutting off loses. Student loans composed about $1 trillion of the bank’s shops and $2.27 trillion was recorded in its trial balance.

The loans decreased 15% ($13.4 billion) in 2009 and the doubtful accounts of the company increased in a very alarming rate. The uncollectible account was at 72% since 2009, this is according to JPM itself. In 2012 the bank made lesser transactions with student loans, they cut the number to only $300 million from 2010 which was $1.9 billion.

Since July of 2010, private entities were no longer allowed to give loans to those who were given financial help by the government. The financial aid for students became the main reason for the nation’s debt.

The Consumer Financial Protection Bureau is now conducting an investigation on private financial entities. They are also receiving protests from clients about them. For now, the agency has identified the largest money lender to be Sallie Mae, which had given $36 billion for student loans.